Tuesday, May 24, 2011

The challenge of moving endorsements online

Sara Rice

Advertising firms and marketing departments across the world have mastered the concept of using endorsements for products, brands, and campaigns. With media work moving to the web, the challenge of utilizing the endorsement process comes with the ability for a consumer to distinguish the difference between editorial content and advertising content.

Celebrity endorsements are large investments made by companies and brands. With an audience idolizing an athlete or music prodigy, producing an advertisement to run during a televised sporting event can broaden the pool of consumers and increase a following with the product.

But, what makes a good endorsement? Research has shown that in the United States, the most important value that an endorsement can advocate for is decreased illegal drug use. Celebrity endorsements are a form of a reference group that greatly encourage consumer buyer behavior. With the research showing that investing in an endorsement can greatly increase sales, and much of the consumer process moving to the online medium, advertising firms face the challenge of transporting that successful concept to the online platform.

This week the Federal Trade Commission passed an amendment to the FTC Act that outlines the way that celebrities and endorsements have to go about disclosing their monetary gains from endorsements. One of the main reasons outlined for the disclosure is the need to eliminate "acts or practices that are unfair or deceptive." As a result, a handful of celebrities have already deactivated their Twitter accounts.

Miley Cyrus, an endorser of everything from her own brand of cereal to make-up and toy lines, closed her Twitter account after questions began to arise about her motives behind many of her tweets. After defending endorsements and the constant media blast about which tweets were paid for and which ones were not, she released a Youtube video titled, "Good-bye Twitter," in which she rapped about her need for privacy. Many editorials question if that was really the reason.

One of the reasons Twitter and Facebook pages of celebrities are so popular is the idea of authenticity. Fans like the idea of having a way to interact with their favorite pop idols and athletic stars that feels real. While tweeting celebrities are raking in endorsement money and companies are seeing a spike in sales from big online endorsements, the authenticity in the Twitter connection begins to be lost.

Ad.ly has exploded in the passed couple of years by utilizing the rapid growth of Twitter. An advertising professional could argue that the company is genius. The consumer may argue that the company is profiting on consumer deceit. You decide where you stand...

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